Kelvin Emmanuel, Co-founder and CEO at Dairy Hills, has outlined 7 steps to a successful gas adaptation in Nigeria.
His recommendation comes as a response to the latest broadcast on palliatives and alternative to petrol that President Bola Ahmed Tinubu mentioned .
The president said during his broadcast on national television on Monday, that part of the programme his administration is to roll out buses across the states and local governments for mass transit at a much more affordable rate.
According to Tinubu, provision to invest N100 billion between now and March 2024 to acquire 3000 units of 20-seater CNG-fuelled buses has been made.
He said these buses will be shared with major transportation companies in the states, using the intensity of travel per capital.
“Here’s my advice for the President. In order to accelerate the adoption of Compressed Natural Gas (CNG) that can save Nigerians 58 percent in energy costs, these are steps to take,” Emmanuel said.
Deregulate Gas Prices immediately
Deregulation means that gas prices will start floating and track diesel by 40 percent.
“It is called the bending moment formula for gas prices and the reason it’s important is because investors are incentivized to bring in capital.”
Deepen collaboration
Mandate the Nigeria Gas Infrastructure Company (NGIC), an arm of the Nigerian National Petroleum Company Limited, to work with International Oil Companies to develop more gas gathering manifolds for raising the supply of condensates and associated gas.
Independent audit
According to Emmanuel, the Bureau of Public Procurement should be involved and an external audit for final investment decisions in that pre-feed/feed process for Engineering, Procurement and Construction (EPC) must be taken in order to avoid inflation of contract cost for high transmission pipeline development.
“And this is because Nigeria needs at least 5,000 kilometres of pipes to take methane gas (C1) from manifolds after separation and filtration to city gates for distribution to either storage terminals or depressurisation into CNG stations,” he said.
Credit availability
Require that the Nigeria Gas Marketing Company (NGMC) provides an unsecured open line of credit that will require offtake companies not to provide bank guarantees for more than 6 months of supply.
Fast track CNG stations projects
Emmanuel said retail arms of the NNPC must shift its focus from setting up new petrol stations to setting up CNG stations around Nigeria, with a clear target to ramp up quickly.
Bringing the north onboard
The CEO said that the North has a gas deficit because the Ajaokuta–Kaduna–Kano Natural Gas Pipeline is pending.
“You can’t truck CNG in skids to the far North-West and North-East because of the cap on trucking of 500km.
“You can’t rely on LNG because you need a regasification plant when it arrives at its destination,” he said.
Mergers
“Interestingly, the decision to merge Power and Gas is strategic because of a fundamental problem electricity generating companies have amidst other major ones; is lack of access to gas. Increasing supply through Infrastructure is critical to your vision of raising power generation significantly.
“Deregulating premium motor spirit and floating forex was the right decision, and the long term palliative to inflation is systemic decoupling,” he said. “I wish you (Mr. President) well and Godspeed.”
Credit: BUSINESS DAY.
